Pay On Receipt Speeds Up Payment

Pay On Receipt speeds up payment to suppliers by eliminating the invoicing step. Here is how it usually works:

The customer sends an EDI purchase order to the supplier.

The supplier sends an EDI Advance Ship Notice and ships the goods to the customer in cartons with bar code labels that correspond to the Advance Ship Notice. The Advance Ship Notice is basically an electronic packing slip.

The customer receives the goods at their loading dock, performs the appropriate checking process, and permits the Advance Ship Notice information from the supplier to automatically update their systems for operations and payment. The check process may be a verification that all products match the Advance Ship Notice or there may only be periodic audits of some shipments.

The customer pays the supplier according to the terms of their agreement.

Notice that the supplier does not send an EDI invoice. This streamlines the payment process for the customer and the supplier.

Pay On Receipt is also known as Evaluated Receipt Settlement. It is commonly found in the automotive supply chain and manufacturing industry for trusted suppliers who make many shipments which are similar and repetitive. Experience has shown that removing the invoice process for these kinds of suppliers is more efficient.

You may want to ask your manufacturing customers if you qualify to participate in a Pay On Receipt program. Most retailers do not offer this kind of program.

Contact us anytime to find out more about how we can assist your small business.